PAYX vs PCTY: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of October 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. PAYX and PCTY share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined PAYX and PCTY exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Paychex has been processing payroll for small and mid-sized American businesses since 1971, and the core of the business is still that: a recurring fee per client per pay period, collected from roughly 800,000 customers across the US and Europe. The company reports in two segments. Management Solutions (~$4.87B of FY2026 revenue) is payroll, time and attendance, benefits administration, retirement recordkeeping and HR software, sold through Paychex Flex, SurePayroll and now Paycor. PEO and Insurance Solutions (~$1.43B) is the co-employment business, where Paychex becomes the employer of record for a client's worksite employees and bundles health insurance and workers' compensation. A third, smaller line matters more than its size suggests: Paychex holds client payroll tax money between collection and remittance and earns interest on that float, which produced ~$211M in FY2026.

Full PAYX guide

Paylocity Holding Corporation runs a single cloud platform that handles payroll, tax filing, benefits administration, time and attendance, talent management and, since the Airbase acquisition, corporate spend management. Clients are typically US companies with 10 to 5,000 employees, and as of June 30, 2026 there were about 44,400 of them (excluding clients picked up through acquisitions), averaging more than 150 employees each. Pricing is a base fee plus a per-employee charge that scales with how many products a client turns on, which is why revenue grows on two axes: adding logos and selling more modules into the ones already there. In fiscal 2026 the client base grew roughly 7% while recurring revenue grew 12.2%, so about five points came from expansion inside existing accounts. Annual revenue retention has stayed above 92% in each of the last three fiscal years. The company employs around 6,900 people and is headquartered in Schaumburg, Illinois.

Full PCTY guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• PAYX drivers: The Paycor integration and the move upmarket; WISE and whether AI shows up as revenue or just cost.
• PCTY drivers: Land, then expand inside the client; Margin leverage and a shrinking share count.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Competition is the structural issue: ADP is larger and better capitalized at the top, while Gusto, Rippling, Justworks and OnPay have taken share at the small end with cleaner software and transparent pricing, and Paylocity and Paycom sit directly on the mid-market ground Paycor was bought to defend. For PCTY, the most concrete risk is the deceleration itself: guiding about 8% recurring growth after delivering 12.2%, with the first quarter at about 10%, implies the exit rate is lower still, and multiples on software tend to compress when growth crosses from double digits into single digits.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick PAYX if you believe its drivers more; PCTY if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the PAYX and PCTY guides.

PAYX. Paychex reports on a May fiscal year end, so the FY2026 figures above are the most recent full-year set and the trailing-twelve-month picture as of mid-September 2026. Screening tools that still show revenue near $4B are quoting a pre-Paycor period; the Paycor deal closed in April 2025 and is what carried FY2026 to ~$6.51B. Fiscal 2027 first-quarter results, covering the three months ended August 31, 2026, are due before the open on September 23, 2026, and will be the first quarter where the Paycor comparison is like-for-like.

PCTY. The two revenue lines matter and are easy to conflate: screeners usually quote the ~$1.77 billion total, which includes ~$120 million of interest earned on client payroll cash, a line that moves with short-term rates rather than with software demand. Stripping it out, the software business grew 12.2% and carries a 32.4% adjusted EBITDA margin. Enterprise value is roughly $7.9 billion after ~$272 million of cash and ~$81 million of debt, putting the stock near 4.5 times trailing revenue and about 12 times trailing adjusted EBITDA, with a free cash flow yield above 5%.

Headline figures (approximate, September 2026): PAYX shows revenue (fy2026, ended may 31, 2026) ~$6.51B, up ~17% (Management Solutions ~$4.87B, PEO and Insurance ~$1.43B, interest on client funds ~$211M), adjusted operating margin ~43.2% for FY2026, guided to ~44% in FY2027; GAAP operating income ~$2.51B on a ~38.6% margin, adjusted diluted eps ~$5.51 for FY2026, up ~11%; GAAP diluted EPS ~$4.89, up ~7%, fy2027 guidance Revenue growth of 5% to 6%, adjusted EPS growth of 7% to 9%, interest on client funds of $195M to $205M (a decline), tax rate ~24%; PCTY shows revenue (fy2026, ended june 30, 2026) ~$1.77B, up ~11.0%, recurring and other revenue (fy2026) ~$1.65B, up ~12.2%, interest on funds held for clients (fy2026) ~$120M, down ~3%, gaap diluted eps (fy2026) ~$4.92, up ~22.4%.

PAYX and PCTY are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined PAYX and PCTY exposure against your real portfolio. It is not an investment adviser.